Sensex, Nifty hit lowest level in nearly 17 weeks
Weakness continued on the bourses in morning trade. The barometer index, the S&P BSE Sensex, was down 216.20 points or 1.07%, up close to 30 points from the day's low and off about 60 points from the day's high. The market breadth, indicating the overall health of the market was weak. All the sectoral indices on BSE were in the red. Weakness in Asian stocks and a sharp decline in US stocks on Monday, 3 February 2014, hit sentiment on the dometic bourses adversely as the Sensex fell below the psychological 20,000 mark and the 50-unit CNX Nifty fell below the psychological 6,000 mark. The market sentiment was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Monday, 3 February 2014. The Sensex and the Nifty, both, hit their lowest level in nearly 17 weeks.
Metal stocks extended Monday's losses triggered concerns of slowdown in Chinese economy. Telecom stocks dropped on fears of heightened competition in the ongoing mobile spectrum auction.
Indian stocks edged lower in early trade on weak Asian stocks and after sharp decline in US stocks on Monday, 3 February 2014. The 50-unit CNX Nifty fell below the psychological 6,000 level. The Sensex and the Nifty, both, hit their lowest level in almost 17 weeks.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Monday, 3 February 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 735.73 crore on Monday, 3 February 2014, as per provisional data from the stock exchanges.
Asian stocks fell on Tuesday, 4 February 2014, after data showing weaker-than-expected growth in US manufacturing worsened already sour sentiment.
At 10:20 IST, the S&P BSE Sensex was down 216.20 points or 1.07% to 19,993.06. The index tumbled 246.14 points at the day's low of 19,963.12 in early trade, its lowest level since 9 October 2013. The index declined 157.38 points at the day's high of 20,051.88 in early trade.
The CNX Nifty was down 62.90 points or 1.05% to 5,938.90. The index hit a low of 5,933.30 in intraday trade, its lowest level since 9 October 2013. The index hit a high of 5,953.75 in intraday trade.
The S&P BSE Mid-Cap index was off 39.17 points or 0.63% at 6,218.30. The BSE Small-Cap index was off 46.22 points or 0.74% at 6,187.52. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,101 shares fell and 542 shares rose. A total of 84 shares were unchanged.
Among the 30-share Sensex pack, 27 stocks declined and only three rose. Wipro (down 3.51%), TCS (down 2.99%) and M&M (down 2.98%) edged lower.
Metal stocks extended Monday's losses triggered concerns of slowdown in Chinese economy. China is the world's largest consumer of copper and aluminum. Sesa Sterlite (down 2.1%), Steel Authority of India (Sail) (down 0.97%), JSW Steel (down 0.89%), Hindustan Copper (down 1.9%), NMDC (down 1.65%), Bhushan Steel (down 1.94%), Hindustan Zinc (down 0.92%), Tata Steel (down 1.02%), and Hindalco Industries (down 3.09%) edged lower.
Jindal Steel and Power lost 0.43%. The company after market hours on Monday, 3 February 2014, said that its power generation unit Jindal Power has acquired a stake in the company owning the Kineta power project in Andhra Pradesh. The Kineta Power project is not under construction and is not an operational power plant. This project has only land and statutory clearances. The acquisition value is not significant and there are no immediate plans for starting construction, Jindal Steel and Power said. "As and when, the plans are made in the future the same will be appropriately disclosed as required," Jindal Steel and Power said.
National Aluminium Company (NALCO) shed 0.75%. The company has set up its 2nd Wind Power Plant at Ludarva in Jaisalmer district of Rajasthan with a capacity of 47.6 megawatts (MW). NALCO has successfully commissioned this wind power project on 29 January 2014. As part of its diversification plans, National Aluminium Company (NALCO), A Navratna PSU, has been foraying into other metals and energy sectors.
This Rs 283 crore Wind Power Project was executed through Gamesa Wind Turbines, which involved erection of 56 Wind Turbines, each of 850 KW rating. In the first phase of commissioning, 36 turbines were erected. Now, in the second phase, the remaining 20 turbines have been successfully commissioned. This is the second green initiative of NALCO towards promoting sustainable development by harnessing the unconventional and renewable energy sources, which would credit the company with incentives from the Government.
Earlier, the company commissioned its first Wind Power Plant of 50.4 MW capacity at a cost of Rs 274 crore at Gandikota in Kadapa district of Andhra Pradesh in December, 2012.
Besides, the company is also planning to set up the third wind power plant in its own mined out area of Panchpatmali Bauxite deposit in Koraput.
Telecom stocks dropped on fears of heightened competition in the ongoing mobile spectrum auction. MTNL (down 1.64%), Idea Cellular (down 0.61%), Bharti Airtel (down 2.04%) and Tata Teleservices (Maharashtra) (down 0.04%) declined. Reliance Communications rose 1.7%.
The auction of spectrum in the 1800 MHz and 900 MHz band began on Monday, 3 February 2014. Seven rounds of bidding were completed at the end of day one. Bids have been received in all 22 Service Areas in 1800 MHz band and in all 3 Service Areas in 900 MHz band. Thus, bidding has taken place in all the Service Areas in both bands, the Ministry of Communications & Information Technology said in a statement issued at 20:39 IST on Monday, 3 February 2014.
Power Grid Corporation of India rose 0.53% after the central bank raised foreign institutional investors' investment limit in the company to 30% of its paid up capital. Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 30% of the paid up capital of Power Grid Corporation of India (PGCIL) under the portfolio investment scheme (PIS), the Reserve Bank of India (RBI) said in a notification on Monday, 3 February 2014.
PGCIL has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing to enhance the limit for the purchase of its equity shares and convertible debentures by FIIs, RBI said.
As at 31 December 2013, FIIs held 25.37% stake in PGCIL.
Hero MotoCorp rose 0.24%. The company said during market hours its total sales rose 0.61% to 5.61 lakh units in January 2014 over January 2013. Riding on record sales in the festive months of October and November, the company had closed 2013 with sales of 61.83 lakh units, its highest ever sales for any calendar year.
Jaiprakash Power Ventures lost 3.05% after the company reported a net loss of Rs 153.05 crore in Q3 December 2013, higher than net loss of Rs 97.58 crore in Q3 December 2012. The Q3 result was announced after market hours on Monday, 3 February 2014. Jaiprakash Power Ventures' total income rose 17.22% to Rs 513.83 crore in Q3 December 2013 over Q3 December 2012.
Jaiprakash Power Ventures said that the results under review are in respect of 300 MW Jaypee Baspa II H.E. Plant, 400 MW Jaypee Vishnuprayag H.E. Plant, 1000 MW Jaypee Karcham Wangtoo H.E. Plant and 500 MW Jaypee Bina Thermal Power Plant. The corresponding figures of the quarter/period in the previous year are only for 300 MW Baspa II H.E. Plant, 400 MW Jaypee Vishnuprayag H.E. Plant and 1000 MW Jaypee Karcham Wangtoo H.E. Plant and 250 MW Jaypee Bina Thermal Power Plant and hence not comparable.
On macro front, the Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
The second part of the Winter Session Parliament begins tomorrow, 5 February 2014. The session, subject to exigencies of business may conclude on 21 February 2014. The UPA hopes to approve the splitting of the state of Andhra Pradesh into two states as well as a number of corruption bills during the Winter Session Parliament.
The Finance Ministry will present the Vote-on-Account or interim budget during the Winter Session Parliament. The objective of a Vote-on-Account is to get Parliament's nod for expenditure to be incurred in the months prior to elections. The next full-fledged budget will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.
Asian stocks fell on Tuesday, 4 February 2014, after data showing weaker-than-expected growth in US manufacturing worsened already sour sentiment. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore and South Korea were off 0.59% to 3.43%
The stock market in Taiwan was closed for the Lunar New Year holiday. Stock markets in mainland China markets remain closed until 7 February 2014 for the Lunar New Year holiday.
Trading in US index futures indicated that the Dow could advance 37 points at the opening bell on Tuesday, 4 February 2014. The US stock market closed with sharp losses on Monday, 3 February 2014, after a much weaker-than-expected reading on manufacturing data as well as concerns over a slowdown in China, triggered the worst selloff in several months. The implied volatility as measured by the CBOE Vix index, which moves inversely to the S&P 500, jumped 14.6% to 21.09, a level not seen since Dec. 28 2012, when the markets confronted the fiscal cliff.
Data showed factory activity in the US expanded in January at the weakest pace in eight months as orders slumped, a sign manufacturing cooled at the start of the year along with the weather. The Institute for Supply Management's factory index decreased to 51.3 from 56.5 the prior month, the Tempe, Arizona-based group's report showed. Readings above 50 indicate expansion.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
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